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By now you know the heir apparent at
MicrosoftMSFT -0.3839590443686007%Microsoft Corp.U.S.: NasdaqUSD46.7
-0.18-0.3839590443686007%
/Date(1438376400181-0500)/
Volume (Delayed 15m)
:
30245315AFTER HOURSUSD46.77
0.070.14989293361884368%
Volume (Delayed 15m)
:
956165
P/E Ratio
31.986301369863014Market Cap
374860906124.115
Dividend Yield
2.6552462526766596% Rev. per Employee
731094More quote details and news »MSFTinYour ValueYour ChangeShort position
has left the building. Steven Sinofsky, who ran Microsoft's Windows division, worth 25% of the company's annual revenue and more than half its operating profit—and who worked at the company for 23 years—announced Monday he was leaving for "personal reasons."

There's not a lot to be gleaned from Sinofsky's departure about the immediate health of Microsoft (ticker: MSFT).

Reports in the papers said there were personality conflicts and a lack of team spirit on Sinofsky's part, but it's a big company with many talented individuals, and Microsoft has survived numerous departures over the years.

The shakeup itself seems far less important than the symbolic value of the event. Microsoft, like much of the PC industry, is grappling with a change far broader than the immediate health of Windows.

As Barron's said a month ago in our cover story on the future of the PC ("Bye-Bye, PCs," Oct. 22), the winds are blowing ill these days for the traditional computing business. Signs of that change continue to mount, and as they do, stocks at the heart of the PC business become cheaper and cheaper.

The latest sign of the slide in the PC world was Dell's fiscal third-quarter report last Thursday, in which revenue missed analysts' expectations. The worst part of the report was the part that touched on PC demand. Consumer revenue fell by 23%, while sales of "mobility" products, primarily laptop computers, fell by 26%.

Another tidbit came on Thursday from tax-software maker
IntuitINTU 0.02837147720824664%Intuit Inc.U.S.: NasdaqUSD105.77
0.030.02837147720824664%
/Date(1438376400211-0500)/
Volume (Delayed 15m)
:
860027AFTER HOURSUSD105.77
%
Volume (Delayed 15m)
:
44084
P/E Ratio
91.18103448275862Market Cap
29157509875.9891
Dividend Yield
0.9454476694714947% Rev. per Employee
548500More quote details and news »INTUinYour ValueYour ChangeShort position
(INTU), which expects to increase its sales of mobile versions of its software by 50% next year, as opposed to the traditional desktop versions of programs such as TurboTax. The important thing is that those mobile users are actually using the software more, because they always have a tablet or smartphone with them, Intuit CEO Brad Smith told me last week.

All these trends point to a world increasingly moving away from desktops and laptops.

DELL'S STOCK IS CHEAP, but that isn't a reason to bid for it as long as the PC business is a millstone around its neck, says Tony Ursillo of Loomis Sayles, which doesn't own the stock. "When the fundamentals are bad, a stock is never too cheap," Ursillo says.

"The company is still too heavily tied to the big PC and server markets that are in permanent contraction, and the tablet market is ultracompetitive," he adds.

As for Intel, Delphi Investment's Scott Black says it's "a great company, but it's in a bad neighborhood." Adds the Barron's Roundtable member, "I wouldn't want to be buying the stock based on Windows 8 being their only opportunity."

Although
QualcommQCOM -0.03105107902499612%Qualcomm Inc.U.S.: NasdaqUSD64.39
-0.02-0.03105107902499612%
/Date(1438376400091-0500)/
Volume (Delayed 15m)
:
9341551AFTER HOURSUSD64.347
-0.043-0.0667805559869545%
Volume (Delayed 15m)
:
270597
P/E Ratio
17.689560439560438Market Cap
101169697518.798
Dividend Yield
2.9818294766268054% Rev. per Employee
847189More quote details and news »QCOMinYour ValueYour ChangeShort position
(QCOM) has run up to $62, he observes, "at least they've got lots of dynamic growth" as a result of their wireless chips being in many of the tablets and smartphones leading the post-PC revolution.

Some, of course, will point to the fact that Dell and Microsoft and others have made a concerted effort to diversify their business away from being just PCs. At the moment, that trend isn't helping much because it isn't just PCs that are breaking down.

As Goldman Sachs' Bill Shope, who has a Sell rating on Dell, wrote in a note to clients on Friday, "in large enterprise, Dell posted revenue declines of 8% as the company saw deferrals of discretionary IT-hardware purchases from many large commercial customers."

The decline in enteprise spending is something Barclays Capital's Ben Reitzes described last week as a "capital strike," with businesses holding off on buying infrastructure, either because of global macroeconomic concerns or as they await the consequences of the fiscal cliff.

As Reitzes sees things, "Housing is improving, consumption is stable, but the business sector has weakened."

In other words, Dell is getting squeezed between a PC market that's been lagging for some time now, and a corporate market for servers and storage that isn't picking up the slack.

I wouldn't rule out the beaten-down PC names being worth another look at some point, but not while the balance of evidence against the PC market continues to increase, rather than decrease.

The shares briefly surged to $215, giving the company, which had just $3.4 million in revenue last year, a $4.5 billion market value. Like many other heady tech stories, this one was up in smoke in short order, as shares fell back by 90%, on Friday to close at $20.